Reasons to worry about the economy - SDUT's Goldsborough

[question everything]

James O. Goldsborough
The San Diego Union-Tribune

August 2, 2004

According to the Bush administration's tax-cut theorists, the economy and markets should be roaring right about this time – three months before the election. So what has gone wrong? Polls show more voters worried about the economy than the Iraq war. They show more people think John Kerry would do a better job handling the economy than George W. Bush.

(snip)

Problem one is nagging unemployment. Most economists said Bush's tax cuts – primarily benefiting wealthy taxpayers – targeted the wrong people to stimulate consumption. Today's unemployment rate of 5.6 percent is exactly what it was at the end of the recession in November 2001. Though jobs have picked up in recent months, wages have not and continue to lag behind prices.

(snip)

A short-term tax cut aimed at production workers would have done more for our stagnant economy than Bush's long-term cuts for the wealthy. It also would not have created such staggering deficits, higher under Bush as a percentage of gross domestic product than in any year since 1987, when the dollar lost a third of its value and the stock market crashed. Adding to the grief of people who did not primarily benefit from Bush's tax cuts comes a new report by Citizens for Tax Justice, based on an analysis of 186,000 recent tax returns. The report showed that taxes on investment continue to fall relative to taxes on wages and other earnings, further penalizing low-income workers. It also shows that 60 percent of all investment income goes to the wealthiest 5 percent of taxpayers.

(snip)

This is precisely the "two Americas" situation under Bush that Democrats criticized last week in Boston. Bush's tax cuts favored wealthy taxpayers yet the stock market stays stagnant, depressing spending by the wealthy. Meanwhile, middle-and lower-income people have lost ground, while growing deficits produced by the tax cuts weaken the dollar, raise prices, lift interest rates and slow the economy.

More..


Find this article at:
http://www.signonsandiego.com/uniontrib/20040802/news_mz1e2golds.html

Goldsborough can be reached via e-mail at [e-mail].

[MikeG]

1. It may not get better for years and years.

[wurzel]

2. Just traveled across country. It is a sad sight.

I just traveled across the Canada Border States. Michigan to Washington. The scenery is a beautiful as ever. But the small towns are crumbling and ugly. And most people don't look prosperous. The problem is the highway "service areas". They are all full of crappy, uniform corporate facilities: Denny's, Comfort Inns, Motel 8, KFC etc. Even the supermarkets are part of these "service areas" now. The towns are dying because the life blood is being sucked out. The profits from travelers instead of going to local business are going to big corporations who only offer minimum wage jobs. That is what the economy of our small towns now is. And they look like it. So do the people. I don't hear anyone talking about it.

[question everything]

3. We talked to a couple with roots in the Detroit area

and she was telling about a family member who was just laid off, after more than 20 years with the company.

And I asked: so all the news about improvement in the economy? And she said: Michigan is really bad.

[wurzel]

4. Michigan was about the worst we saw.

It was ironic really. As we went through these small towns in some of the most derelict areas we saw the American Flag on the door post. If anything they looked like distress signals. "I"m not waving, I'm drowning".

[Sugarbleus]

6. Your posts are staggering and important. All of you have

captured in words a picture of what's wrong in America. You've also stated a fine case for where and how we need to shore our beautiful country up.

I've seen many, many of those "beside the highway" establishments...I never before thought of them in the way you folks do here, but I see your point...it's true. Except for certain "pockets" of society that seem to be holding their own and hanging on pretty well, there's a sort of "depression era-esque" thing on the verge with the rest of the country. Pretty sad and scary.

Good thread.

[hatrack]

7. When you visit small towns in Kansas and Arkansas and Iowa

And half of the people behind the counters of fast-food chain restaurants are at least 40 years old, you know you're in a town in trouble.

[Green Lantern]

5. NPR

carried a story this AM that reported that companies were reluctant to hire new employees or re-hire old ones because the economy is so soft and unreliable.

Bushwa fights inflation-another way of saying holding down wages and salaries for the worker bees. Yes inflation has other components, but we have had 25 years of fighting inflation with the result that prices have still gone up staggeringly, and wages remain the same as in 1979, while the worker is doing longer hours with fewer and lower level benefits.

The economy stinks because trickle down doesn't. The economy stinks because the administration takes care of the few not the many. The economy stinks because the middle and lower classes are wuickly becoming an endangered species.

If they jimmy the election again, I suggest that 1) we all vote in the streets and 2) Kerry establish a government in exile in say, France or Germany.